Speculators on the market for currency are betting on the fact that those few countries in Europe that do not have the Euro as their currency, but have their currency’s value tied to the Euro, need to abandon this tie as the Euro drops. They therefore buy those countries’ currencies to wait until they are no longer pegged to the Euro.
The value of the Euro dropped considerably because of the problems in Greece. So that’s about why and where speculations started. It is clear, they cause troubles in Europe and put extra pressure on the Greek issue.
Now there is an interesting question that should be investigated, which is: Is it just a random group of speculants, addicted to the game? Or is it a deliberate attempt to destabilize Europe?
In a CNBC article, we read:
‘The reason why Switzerland and Denmark are both behaving aggressively against the euro is because traders in Europe are putting a lot of pressure on it, arguably to test policy makers’ resolve to come to a resolution on Greece and some of the fault lines in Europe around risk-sharing,” Rebecca Harding, CEO at Delta Economics, said via email Thursday, before the Nationalbanken’s latest rate cut.
It would be interesting to know, who those ‘traders’ are. Yet whoever they are, they are causing big damage. Such damage that it’s high time the rules of the speculation game need to be changed.
http://www.cnbc.com/id/102403135
http://www.ft.com/cms/s/0/d3c385f6-adc6-11e4-919e-00144feab7de.html#axzz3RzT4fJd5